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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (35224)	8/23/2009 2:22:09 PM
From: Grantcw	Respond to of 78717

Yes, point taken Paul. I've had a problem or two also with buying cigar butts for the cash and then having the stock continue down. That being said, I think ACTS is a different play for a couple of reasons: 1) It isn't really a cigar butt. Before the recession, it seemed to have good Earnings (Per yahoo - having trouble getting to SEC Filings - $75M in '06, $52M in '07, and $26M in '08), and is still break-even now, and in my view would hopefully pick up some sales and earnings growth to get notice and demand when the economy turns. 2) The companies that I think you have to wait forever for are the ones that have few shares, don't get noticed, and trade in a range for years. The stock market crash took many companies down to below cash levels and most have bounced back. I think this is one of the companies that just hasn't bounced. 3) The risk with some of these companies is that they will use their cash reserves up in an acquisition and nullify the reason you bought the company in the first place. That being said, I think asset values are still depressed and worst-case, if they did that, they would hopefully be getting a good deal on whatever they bought. I guess, to me, the downside is small given the cash, but given the market cap is $176M now, what valuation would the company get if it could grow back to $50M in earnings as the economy gets on regular footing? ACTS, to me, seems different than a normal below cash play. FCH is now at 3.82 and I'm looking to sell my final bit of that stock to get some ACTS at the open tomorrow (still keeping BEE and SPPR, as well as a REIT fund in my 401k) to diversify more out of my hotel reit position while they're up. Thanks, cw

To: Paul Senior who wrote (35224)	9/2/2009 2:12:06 PM
From: Paul Senior	Respond to of 78717

Upping my position in FACT a little. Looks like company might deploy most of its cash in a venture with another company in the production of a cancer drug. Subtracting the upfront payments FACT will make and adding in FACT's ltd, the cash per share that FACT has is still above the current stock price (which has fallen with the announcement of the jv). finance.yahoo.com Maybe FACT mgmt knows what they are doing--- they should if they are willing to commit over $100M. Very risky and speculative bet for me though. So just a few shares.